Data is now the most important commodity all businesses possess. Managing what can be vast databases of information needs a new role. The Chief Data Officer is vital to ensure the data available leads to insights and commercial opportunities.
With data now acknowledged to be the new value creator, a well-managed and secure data strategy is no longer a competitive advantage – it’s key to survival. Firms need to make the most of a Chief Data Officer’s expertise and this article emphasizes the hurdles CDO’s often find themselves stymied by like internal opposition and resistance to change. This article would suggest measures firms can put in place to bolster the impact a CDO can bring to a business.
Gary Richardson has over 17 years of consulting experience and leads a team of data scientists and data engineers in the agile development of Blockchain, AI and Machine Learning solutions. The focus of the team is bringing a collaborative approach to analytics, underpinned by machine learning and data engineering. He believes mainstream business adoption of AI solutions are the key to accelerating innovation enabling businesses to compete, reduce cost and ensure compliance. Prior to joining 6point6, Gary was the Head of Data Engineering at KPMG focussing on blockchain and bringing sound data engineering to the world of AI.
How do we define a CDO today?
The CDO is a senior executive taking charge of an organisation’s broad data and information strategy, control, policy developments and governance. This involves being responsible for information protection, governance, privacy, data quality and management, as well as the leveraging of data to generate business value.
What are the key drivers behind the emergence of the CDO?
The growth of digital technology results in the creation, and harvesting, of more data than ever before. Data is increasingly regarded as a business asset that can be used strategically to find new revenue opportunities as well as to lower operating costs.
Companies that have a clear and effective data strategy are therefore able to act with confidence and make appropriate business decisions to drive growth know the insight is grounded on well-managed data.
Legal obligations, including GDPR, mean there are increased constraints around the collection, exploitation, and security of data, which means businesses increasingly look to a senior executive to build effective safeguards against falling foul of their obligations.
How does the CDO differ from a CTO or Chief Digital Officer?
CTOs are tasked with understanding deeper technology trends and opportunities for the company. They often have more of a customer-facing role and are usually largely responsible for enhancing a company’s product offerings, as well as the development of new technologies within a company. CIOs meanwhile will focus more on organisational issues that can be solved via existing IT solutions as well as keeping the “lights on” of the IT Operation.
Chief Digital Officers are transforming traditional operations within a company using digital processes. Their aim is to generate new business opportunities, revenue streams and customer services via the adoption of digital technologies. They must determine which areas of the business can support a shift to becoming more digital and which influencers will need to be empowered to effect this change.
Are CDOs more involved with strategic planning as data becomes increasingly vital to manage and exploit across a business?
As the digital revolution continues, there will be a bigger need for businesses to leverage the business opportunities brought about by data. This means that CDOs will need to take on a leading role in anticipating and capitalising on the uses of data. They will be vital to the effective management of, enablement with and control of data.
While information governance is key, CDOs must not lose sight of business outcomes they need to achieve. They will, therefore, need to be involved more and at an earlier stage in organisation’s strategic planning so as to ensure that data strategies are aligned and the business is on track to achieve its goals.
At present, some CDOs focus heavily on strategy, considering the big picture and directing leadership and direction. Other CDOs work more closely with their data scientists or carry out tasks that might also fall under data scientists’ remits.
With AI on the rise across all business sectors, will CDOs need to enhance their skill set to ensure their organisations can benefit as AI expands and develops?
The potential of data and its role in improving business performance can only be harnessed if businesses are able to derive full value from it. This means a CDO must have the skills to gain actionable insights from data and understand what technologies are needed to leverage data comprehensively.
CDOs are now responsible for far beyond simply regulatory compliance-driven data governance and stewardship, they must protect and grow data as an asset, drive change and facilitate analytics and innovation. This will also mean looking into the use of AI since this will play a major role in deriving long term business value.
The office of the CDO must include the control of training data used by NLP, machine and deep learning as well as standard analytics techniques. Since AI has the potential to revolutionise the way in which we work, CDOs must evaluate how and where to apply AI and the data used to train the machines to deliver customer experiences.
Are CDOs the architects of data-modernization initiatives?
Some firms do require CDOs to create data-modernising initiatives, usually involving a shift from batch-oriented workloads to real-time streaming, as well as event-driven approaches to data integration. While the CDO is focused on governance and the need to build relationships and establish trust, they must also be aware of the business’ needs and long-term strategy.
This means driving a new culture towards data, organisational and business change. It is a hard task for one person to fulfil all these diverse roles completely, which means having information related roles supporting the CDO is also key, as is clearly delineating what will be the CDO’s responsibility, and what will come under the remit of a CAO, CTO or CIO.
What does the future of the CDO look like?
Since data is understood as the new value creator, a clear data strategy and effectively managed data will increasingly be key to business success. As such, the number of CDOs has grown hugely over the last few years, New Vantage Partners found only 12% of companies had a CDO in 2012, while in 2019 it reached 68%.
There is currently a broad range of responsibilities falling to the CDO, and these vary from company to company hugely. Meanwhile, CDO’s themselves are often prevented from doing an effective job through internal opposition and resistance to change, centred around a lack of effective data-centric culture.
What will be key looking ahead is for this culture to shift towards one in which data is at the centre of all business decisions, and key principles and practices of data management are instilled in an organisation, ranging from investment in tools and technology to practices, processes and people. The CDO will be key to ensure companies move in this direction, and will become increasingly vital for businesses looking to stay ahead of the curve.